Ecuador battles over

A YEAR ago, protests by Indian farmers against a plan to adopt the dollar helped to topple Ecuador's president. The dollar is now the currency. But this week, the Indians were again on the streets. Their target: a decree which doubled the price of cooking gas, and put up the price of petrol by 22%. This was a tough test of President Gustavo Noboa's commitment to reform the sickly economy.

The farmers blocked roads across the Andean highlands and the Amazon lowlands; in the capital, Quito, thousands camped out in the grounds of a university. Mr Noboa declared a state of emergency; the security forces, trying to clear a roadblock, killed four protesters.

But on February 7th, a deal was struck: the government agreed to freeze the petrol price for a year, and cut that of cooking gas from $2 to $1.60 for a 15 kilo (33lb) cylinder, until it targets subsidies to the poor. The Indians went home.

Four-fifths of Ecuadoreans now live in poverty. For them, cheap cooking gas is vital. But, under dollarisation, the government can no longer print money. Even now, fuel subsidies will cost it 2% of GDP. The increases were needed to balance this year's budget, and were required by the IMF. But the Fund may well swallow the deal, provided the government proceeds with a much-delayed plan to raise VAT.

The Indians have accepted, in principle, an end to universal fuel subsidies. Mr Noboa, Ecuador's sixth president in five years, has been weakened by this battle. But he still has the backing of the armed forces, and of the businessmen of Guayaquil, the main port. And he has survived.